Hundreds of servicemembers who lost their homes due to foreclosure between 2006 and 2010 are set to recover over $39 million in monetary relief.
The Justice Department said the payments are being made by BAC Home Loans Servicing LP, a subsidiary of Bank of America, and Saxon Mortgage Servicing, a subsidiary of Morgan Stanley, under settlements from 2011 in which the servicers allegedly violated the
Under the first settlement, Bank of America is required to pay $36.8 million to military personnel whose homes were unlawfully foreclosed upon. Each servicemember will receive a minimum of $116,785, as well as compensation for any equity lost with interest, the DOJ stated.
Borrowers receiving payment under this settlement may receive an additional payment under a settlement between Bank of America and federal banking regulators—the Office of the Comptroller of the Currency and the Board of Governors of the Federal Reserve System—if the foreclosure occurred in 2009 or 2010. Payments provided under the federal banking regulators’ settlement will bring the total amount received by eligible borrowers to $125,000 plus equity where applicable.
Bank of America has already started compensating 142 servicemembers for violating the SCRA, but this number will increase to 155 because of illegal foreclosures that occurred from mid-2009 through the end of 2010.
As part of the second settlement, Saxon Mortgage Services is required to provide over $2.5 million to 19 servicemembers for not abiding to the SCRA. Through this settlement, service members will obtain at least $130,555, plus compensation for any equity lost with interest as a result of being foreclosed upon.
“Our men and women in the military should not have to worry about a bank foreclosing on their home while they bravely serve our country,” said Eric Halperin, special counsel for fair lending in the civil rights division for the Department of Justice. “The Justice Department will vigorously enforce the laws that protect servicemembers while they do their difficult and necessary work.”
